The Blog of International Judicial Assistance | By Ted Folkman of Murphy & King

Arbitral Tribunals as “Tribunals” Under The Judicial Assistance Statute

Posted on January 11, 2011

Prior to 2004, it was fairly clear that arbitral tribunals were not “tribunals” for purposes of the judicial assistance statute, 28 U.S.C. § 1782, and thus that the statute did not authorize the District Courts to compel discovery in aid of foreign arbitrations. But in light of dicta in Intel Corp. v. Advanced Micro Devices, Inc.,a 2004 Supreme Court decision, the district courts have divided on the question. Judges in Massachusetts, Delaware, Minnesota, and the Northern District of Georgia have held that arbitral tribunals are tribunals within the meaning of the statute. Judges in the Northern District of Illinois, the Southern District of Texas, and New Jersey have held the contrary.

In a recent note in the Washington & Lee Law Review, Brandon Hasbrouck argues for the broader construction of the statute. He points to statements by the statute’s principal draftsman, Hans Smit, asserting that the drafters had affirmatively intended to bring within the statute “all bodies with adjudicatory functions.” Hasbrouck recognizes the major practical flaw with his preferred approach, namely that permitting parties access to US pretrial discovery mechanisms is contrary to the expectations of parties who enter into agreements to arbitrate precisely to avoid lengthy and expensive pre-hearing discovery and to avoid litigation in the national courts. But he proposes a multi-factor test, including factors such as the burdensomeness of the discovery and the character of the foreign proceedings, as a way to limit the statute’s impact on international arbitrations. He also proposes amending the statute to require the District Court to make specific findings justifying its exercise of discretion under the statute.

My own view is that Hasbrouck’s proposal goes too far. American-style pre-trial discovery is one of the bêtes noires of the international legal community, and avoiding it one of the main motivators of many arbitration agreements. Even the proposed multi-factor test hardly solves the problem, since ancillary litigation over the application of such a test can be costly and time-consuming. Nor is it clear why the U.S. courts should have the power to open the doors to U.S. pre-trial discovery in foreign arbitrations when many cases hold that they lack the power to do so in domestic arbitrations (the cases on this point generally hold that under Section 7 of the Federal Arbitration Act, the courts may, on petition, enforce arbitrators’ subpoenas for the appearance of witnesses at the hearing itself, but not for the appearance of witnesses at pre-hearing depositions). Along these lines, Section 7 of the FAA authorizes a court to enforce a subpoena only when issued by the arbitrator. But under the judicial assistance statute, the tribunal need not seek judicial assistance; the parties themselves may do so. Again, the question is why U.S. law should provide superior rights to parties to foreign arbitrations.

In the shameless promotion department: the post-Intel district court cases on both sides of this issue are cited in a recent article I wrote with my colleague Penny Gilbert of Powell & Gilbert in London, which appears in the December 14 edition of CDR’s online newsletter (subscription required).

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